On May 6, 2021, the Inter-American Dialogue hosted the online event, “Healthcare Investment & Economic Recovery in the Americas.” The panel discussed the state of healthcare in the region, and how targeting specific health investments can lead to a more sustainable economic recovery in Latin America and the Caribbean.
The event featured welcome remarks by Michael Shifter, president of the Inter-American Dialogue, with comments from panelists Luis Miguel Castilla, former minister of economy and finance of Peru, Jaana Remes, partner and economist at the McKinsey Global Institute, and Rolf Hoenger, area head of Roche Pharma Latin America.
Shifter began the event by contextualizing the consequences of poor health in Latin America and the Caribbean, citing that the region has only eight percent of the world’s population yet has registered roughly 35 percent of Covid-19 deaths globally. Even before the pandemic, chronic health problems were a detriment to the region’s overall prosperity. Policymakers have an important role to play in linking health ecosystems to economic growth and thinking about how scarce fiscal resources can be used to improve health outcomes.
Remes shared that health was not part of the economic growth conversation prior to the pandemic. She argued this is a great oversight considering that each year “poor health created a loss of 15 percent of our GDP across the world and across the Americas as well.” Remes pointed out that, although it is easy to recognize that poor health affects aging people, most people would be surprised to know that two-thirds of the Latin American health burden occurs in people of working age. Treatable conditions such as diabetes and lower back pain can cause an early exit from the workforce, compel people to take more sick leave, or simply be less productive at work. Remes suggests that the conversation should shift from treating disease to maintaining health. Whether through changes in lifestyle or preventative medicines, improving health would not cost as much as treatment and would lead to higher GDP. Policymakers need to take advantage of the moment and actively work towards improving quality-of-life and economic prosperity in the region and across the world, she noted.
Panelists emphasized that health systems in the region already suffered from deficiencies. Hoenger specifically referenced a lack of trained physicians and overcrowded hospitals as two longstanding concerns. He expanded upon Remes’ link between poor health and the economy, arguing that the weak health institutions forced governments in the region to take desperate retractive measures such as lockdowns to try to control the pandemic, which ultimately led to increased poverty. Hoenger suggested we pay more attention to specialized medicine and find the “right treatment for the right patient at the right time.” Promoting collaboration between the public and private sectors could help create a collective responsibility to improve health for all, he noted.
Castilla cited Peru as an example of a Latin American country having one of the highest death rates per capita and largest declines in GDP growth. He viewed vaccination as the strongest tool available at present to rebuild economies across the region. And in addition to building new hospitals to treat patients during the current health crisis, as has been the focus over the past year, he suggested countries need to pay more attention to service delivery, being proactive in healthcare, as opposed reactive in treatment. Moreover, the pandemic has forced countries like Peru to reflect on decades of market-friendly policies that have not necessarily benefitted the masses. Castilla sees the crisis surrounding the pandemic as one that could lead to more multilateralism and collaboration to address this health service delivery gap.
Moving forward, panelists agreed that US support would help in this pursuit and that they have already seen progress in Joe Biden’s first months as president. Panelists recommended that governments and health systems study aging trends and track information on diseases and conditions. Moreover, governments need to collect more data on healthcare system supply and demand. This will require new funding and investment. In reference to questions from the audience on sustainable spending, Castilla noted that governments should adopt measures to increase the tax base and enforce compliance to prevent tax evasion or avoidance, which are common in the region. By eliminating loopholes and disincentivizing certain behaviors, governments will better be able to focus efforts and spending on long-term goals, such as creating healthier, more resistant populations, ultimately improving quality-of-life indicators and the regional economy.